The Most Important Way in Which Inefficiency Occurs Is

question 17

Multiple Choice

The most important way in which inefficiency occurs is

• A)producing more military goods instead of civilian goods.
• B)limiting economic growth by limiting capital spending.
• C)unemployment of labor and other resources.
• D)producing outside the production possibilities frontier.
• E)All of the above are correct.

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Definitions:

Income Elasticity

A measure of how the demand for a good or service changes with a change in the consumer's income.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with high elasticity indicating greater responsiveness.

Total Expenditures

The sum of all spending or expenses incurred by an individual, household, or organization.

Perfectly Inelastic

describes a situation where the demand for a product does not change in response to changes in its price.